Federal Government approves new policy to boost local production of tomatoes

The Federal Government (“FG”) of Nigeria has developed and approved the implementation of a tomato sector policy (“the Policy”) whose primary aims include – increasing the local production of fresh tomatoes; increasing local production of tomato concentrates and reducing post-harvest losses.

Highlights of the Policy include:

Increase in the tariff on tomato concentrate to 50% and introduction of additional levy of US$1,500 per metric ton;

Classification of greenhouse equipment as agricultural equipment in order to attract 0% import duty;

Stoppage of importation of tomato paste, powder or concentrate put up for retail sale;

Stoppage of the importation of tomatoes preserved otherwise by vinegar or acetic acid;

Inclusion of tomato production and processing in the list of industries eligible for investment incentives (e.g. tax holidays) administered by the Nigeria Investment Promotion Commission (NIPC).

The Policy is expected to become effective on 7 May 2017 and would be implemented by the Federal Ministry of Industry, Trade and Investment in collaboration with the following agencies:

Federal Ministry of Agriculture and Rural Development;

Federal Ministry of Finance;

Federal Ministry of Water Resources;

Central Bank of Nigeria;

Bank of Industry; and

National Agency for Food and Drug Administration and Control.

The new tomato sector policy is one of FG’s strategic tools for stimulating the agro-allied industry. Nonetheless, as with many trade policies adopted by the FG, it would be difficult to immediately predict the likelihood of success of this tomato sector policy. For instance, what level of stakeholder consultation preceded the adoption of this policy? To what extent would new measures under this policy adequately counteract the incentive to import tomato concentrates? How much of an impact would smuggling have on this policy? Are the impacts of the application of this policy on consumers already defined with appropriate mitigation developed?